29 December 2017
Market snapshot
Equities - India
Close
Chg .%
Sensex
33,848
-0.2
Nifty-50
10,478
-0.1
Nifty-M 100
20,991
0.1
Equities-Global
Close
Chg .%
S&P 500
2,688
0.2
Nasdaq
6,950
0.2
FTSE 100
7,623
0.0
DAX
12,980
-0.7
Hang Seng
11,684
0.6
Nikkei 225
22,784
-0.6
Commodities
Close
Chg .%
Brent (US$/Bbl)
66
0.5
Gold ($/OZ)
1,295
0.6
Cu (US$/MT)
7,254
0.7
Almn (US$/MT)
2,275
1.5
Currency
Close
Chg .%
USD/INR
64.1
-0.1
USD/EUR
1.2
0.5
USD/JPY
112.9
-0.4
YIELD (%)
Close
1MChg
10 Yrs G-Sec
7.4
0.18
10 Yrs AAA Corp
8.2
0.18
Flows (USD b)
28-Dec
MTD
FIIs
0.1
-0.9
DIIs
-0.1
1.1
Volumes (INRb)
28-Dec
MTD*
Cash
456
344
F&O
13,509
7,068
Note: YTD is calendar year, *Avg
YTD.%
27.1
28.0
46.3
YTD.%
20.0
29.1
6.7
13.1
24.4
19.2
YTD.%
19.8
12.4
31.3
33.5
YTD.%
-5.7
13.6
-3.5
YTDchg
0.9
0.6
YTD
7.6
13.8
YTD*
310
5,783
Today’s top research idea
Motherson Sumi: Magical times ahead!
MSS is in a sweet spot to benefit from the evolving disruptive global
automotive trends, which would drive its next wave of growth. MSS is now
entrenched in the virtuous cycle of 'scale begets scale', as it would significantly
benefit from OEMs' focus on vendor consolidation.
MSS has strong organic growth opportunities in both international and
domestic markets, driven by an increase in content per vehicle, a strong order
book and its entry in new markets/segments.
Over the next 12-15 months, with bulk of SMP plants ramping up, we expect
~19% revenue CAGR to EUR5b by FY20 and EBITDA margin expansion of 450bp
to ~11%.
PKC would benefit from a) strong tailwind in US Class 8 trucks, b) ramp-up in
China Truck and c) ramp-up in rolling stock, driving revenue CAGR of 15%
(FY17-20E) and ~400bp EBITDA margin expansion to ~10.9% by FY20E.
For MSS, we estimate consolidated revenue/EBITDA/PAT CAGR of
22%/30%/33.5% over FY17-20E. We initiate coverage with a Buy rating and a
target price of INR458.
Supportive global trends | Strong growth visibility | Financial discipline
Research covered
Cos/Sector
Key Highlights
Motherson Sumi (Initiating Coverage) Magical times ahead!
Automobiles
Auto retails weak in certain markets; rural sales healthy
Telecom
RJio agrees to buy RCom’s wireless assets
Technology
Universal Exchanges license: Effective from October 2018
Piping hot news
RBI won’t extend deadline for 2nd list of defaulters
RBI formally turned down requests from banks to extend the deadline for
restructuring the debt of companies on a second list of bad loan accounts that it
had issued in August…
Chart of the Day: Motherson Sumi – Magical times ahead!
We estimate 15% CAGR in PKC’s revenue
driven by US class 8 trucks and APAC
SMRPBV has strong order book
resulting in high growth visibility
SMRPBV has started execution of
EUR9.2b orders in last 12 months
Research Team (Gautam.Duggad@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.

In the news today
Kindly click on textbox for the detailed news link
1
Govt moves amendments to
plug loopholes in insolvency law
The government on Thursday
moved amendments to the
Insolvency and Bankruptcy Code
(IBC), seeking to streamline the
law and plug loopholes. The
Insolvency and Bankruptcy Code
(Amendment) Bill 2017,
introduced by finance minister
Arun Jaitley in the Lok Sabha,…
2
Sebi restricts cross-holding in mutual funds, credit rating agencies
The Securities and Exchange Board of India (Sebi) on Thursday approved
norms to improve governance in mutual funds and credit rating agencies
and deepen the securities markets. Sebi also did its bit to help tackle
India’s Rs10 trillion stressed asset problem at a meeting of its board in
Mumbai. For both mutual funds and credit raters, the markets regulator
proposed to restrict cross-holding. Thus, a sponsor of a mutual fund or its
associates cannot hold more than 10% in any other asset management
company or have a board seat…
3
The government is likely to
immediately infuse about Rs
10,000 crore in six state-run
lenders, including United Bank of
IndiaBSE 5.43 %, Dena BankBSE
2.22 % and Bank of Maharashtra,
over the next few weeks, a finance
ministry official said. This amount
will come from the Indradhanush
Plan, where around Rs 18,000
crore is still left…
4
NITI Aayog working on policy
to cut oil bill by $100 bn
The government is working on a
policy to bring down the annual oil
import bill by USD 100 billion by
2030 through extensive use of
methanol in cooking gas and
transportation fuel, union minister
Nitin Gadkari told Lok Sabha. The
government was "shortly" going
to implement a scheme under
which 15 per cent methanol will
be blended with petrol…
Six stressed PSBs may receive Rs
10,000 crore in capital infusion
5
Tata Global Beverages Ltd (TGBL)
on Thursday said it had agreed to
sell its 31.85% stake in Watawala
plantations in Sri Lanka to
Colombo-based Sunshine
Holdings Plc.
In line with its strategy of
focussing on packet tea
businesses in key geographies,
TGBL will sell its stake in joint
venture Estate Management
Services Pvt. Ltd, the managing
agent for the Watawala
plantations, for Rs120 crore, it
said in a regulatory filing…
Tata Global Beverages plans
to sell 31.85% stake in Sri
Lankan plantation
6
RCom-Jio deal: Jio to buy
RCom's mobile assets
Reliance Jio has agreed to buy
assets of younger brother Anil
Ambani's troubled company
Reliance Communication (RCOM).
Jio will buy spectrum, towers and
fiber and wireless infrastructure of
his RCOM which will repay its debt
from the proceeds…
7
Equity and commodity trading
from same platform
At its last board meet of 2017 held
on Thursday, SEBI approved the
convergence of stock and
commodity trading platforms.
Consequently, the Bombay Stock
Exchange (BSE) and the National
Stock Exchange (NSE) can now
launch commodity trading on their
platforms, while MCX can do
equity from October…
29 December 2017
2

Motherson Sumi
BSE Sensex
33,848
S&P CNX
10,478
Initiating Coverage | Sector: Automobiles
CMP: INR372
TP: INR458(+23%)
Buy
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val, INRm
Free float (%)
MSS IN
2,105
395 / 207
2/12/48
782.4
12.2
870
36.9
Motherson Sumi Systems (MSS) is the flagship company of the Samvardhana
Motherson Group. The company was promoted in 1986 in JV with Sumitomo Wiring
Systems and Sojitz Corporation of Japan. MSSL had started out as a single product
(wiring harness) company, but has since expanded its product range to include polymer
products (through SMP), automotive mirrors (through SMR) and elastomers. The group
has four divisions namely the wiring harness (15%), polymers (52%), mirrors (28%) and
others components (5%). The latest acquisition of PKC (100% owned) strengthens MSS
presence in commercial vehicle wiring harness segment. The group operates 230 plants
in 37 countries and employs over 100k people.
Magical times ahead!
Supportive global trends | Strong growth visibility | Financial discipline
MSS has enviable track record of strong performance with unwavering focus on capital
allocation. MSS has evolved as a partner of choice for all most all OEMs in the world,
reflecting in increasing share of business and market leadership in all the key
businesses that it operates in. It is in sweet spot to benefit from evolving disruptive
global automotive trends, which would drive its next wave of growth. MSS is now
entrenched in the virtuous cycle of “scale begets scale”, as it would significantly benefit
from OEMs focus on vendor consolidation. MSS has strong organic growth
opportunities in international as well as domestic market driven by increase in content
per vehicle, strong order book and entry in new markets/segment. We estimate MSS’s
consolidated revenues/EBITDA/PAT to grow 22%/30%/33.5% CAGR FY17-20E.
Consequently, we expect RoCE (post-tax) to improve to 21.2% in FY20 (14.7% in FY17).
We initiate coverage with buy rating and target price of INR458.
Financial Snapshot (INR b) - Consol
Y/E Mar
2017 2018E 2019E
Net Sales
424.9 564.0 670.2
EBITDA
42.8
54.8
75.8
PAT
16.2
21.1
30.3
EPS (INR)
7.7
10.0
14.4
Gr. (%)
18.2
30.0
43.9
BV/Sh (INR)
39.3
46.2
56.5
RoE (%)
25.6
23.4
28.1
RoCE (%)
14.7
13.8
18.7
P/E (x)
48.3
37.1
25.8
P/BV (x)
9.5
8.0
6.6
Shareholding pattern (%)
As On
Sep-17 Jun-17 Sep-16
Promoter
63.1
63.1
63.1
DII
7.6
6.5
6.7
FII
19.7
20
19.9
Others
9.6
10.4
10.2
FII Includes depository receipts
Motherson Sumi
Magical times ahead!
Jinesh Gandhi
+
91 22 3980 5416
Jinesh.Gandhi@motilaloswal.com
Please click here for Video Link
On right side of global automotive megatrends
:
The global automotive
industry is at the cusp of disruption, led by megatrends in the form of (a)
EVs, (b) connect cars, (c) autonomous cars, (d) shared mobility, (e) stricter
emission norms, and (f) platform and vendor consolidation. These trends
have the potential to disrupt the automotive supply chain and challenge
incumbents. We believe, with its diverse product base and market presence,
MSS is set to leverage on these trends to drive its next wave of growth.
PKC – Synergistic acquisition, opens up new businesses; Strong growth
ahead
:
PKC would be biggest beneficiary of strong outlook (up to 25%
growth estimates for CY18) for N.America Class 8 trucks as it enjoys ~62%
market share of US Class 8 truck wiring harness and ~54% of revenues
contribution from North America. PKC is also highly focused on worlds
largest truck market of China, where it has entered recently through two JVs
(3rd JV underway). These two JVs would result in market share addition of
15% in HD trucks and 5% in MD trucks. Lastly, PKC entered rolling stock
business (~USD2b opportunity) in 2015. PKC has already won contract worth
EUR280m from Bombardier since entering into global partnership in May
29 December 2017
3

Stock Performance (1-year)
2016. It is in discussion with other OEMs to develop global supply chain for
electrical system. PKC revenues are expected to grow at 15% CAGR over FY17-
20E, driving ~400bp EBITDA margin expansion to ~10.9% by FY20E.
SMRPBV – the growth engine for MSS; SMP on track to improve margins,
RoCE
:
SMRPBV’s (51% owned hold-co for SMP & SMR) order-book growth lends
us comfort in building ~16% revenue CAGR over FY17-20 for SMRPBV. As of
September 2017, order book stood at EUR15.2b (~2x in 3.5 years), excluding
orders of EUR9.2b, for which execution started in the last 12 months. SMP is in a
sweet spot, as revenue visibility is high and it is nearing the end of an amplified
capex cycle. In the next 12-15 months, with bulk of SMP’s plants ramping up, it
would derive twin benefits of operating leverage and non-recurrence of start-up
costs. We estimate ~19% revenue CAGR to EUR5b by FY20 and EBITDA margin to
expand 450bp to ~11% by FY20, driven by operating leverage, considering the
high fixed cost nature of the business. SMR continues to be #1 PV mirror
company globally and has gained share across markets through continuous
innovation. We estimate 9% CAGR in SMR’s revenue to EUR2b by FY20 and
EBITDA margin to expand further by 120bp to 11.8% by FY20.
Standalone business on strong footing; Beneficiary of high growth in domestic
PV segment, premiumization
:
The India wiring harness business is likely to grow
faster than the PV industry, led by increase in content (due to ongoing
premiumization). BS-6 would increase complexity of wiring harness and increase
value by 20-50%. Also, it would open up the 2W segment for MSS, as 2Ws shift
to electronic fuel injection systems with more sensors. MSS is already market
leader in 2W wiring harness in EU. The India polymer (MATE) and elastomer
(MAE) businesses are evolving from supporting to core businesses to growth
drivers. Polymer business is focusing on leveraging its strengths in export
markets like South Africa for global OEMs. We expect India standalone business
to witness revenue CAGR of 16% and PAT CAGR of 19% over FY17-20E.
Vision 2020 – Management confident to achieve it
:
In May 2015, MSS had
shared its Vision 2020, targeting revenues of USD18b, RoCE of 40% and payout
of 40%. Of USD18b revenues, it was expected organic revenues of USD12.4b and
balance USD5.6b through M&A. M&A has been strategic tool for MSS to
strengthen its relationship with customers and get more share of business.
While acquisitions will play key role to attain revenue targets, management is
very clear that acquisitions have to pass its 40% RoCE hurdle rate in 4-5 years.
Valuation and view:
MSS offers strong visibility of earnings growth along with
improving capital efficiencies. We estimate MSS’s consolidated
revenues/EBITDA/PAT to grow 22%/30%/33.5% CAGR FY17-20E. Consequently,
we expect RoCE (post-tax) to improve to 21.2% in FY20 (14.7% in FY17).
Although MSS is currently trading at premium to its 5 year average PE, premium
valuations are justified considering sharp improvement in post-tax RoCE (~21.2%
in FY20 v/s average ~13.4% in last 5 years) and possibility of stronger than
expected earnings growth. The stock trades at 25.8x/20.3x FY19E/20E consol.
EPS. We initiate coverage with buy rating and target price of INR458/share
valuing 25x FY20 consolidated EPS (in-line with historical average).
29 December 2017
4

Exhibit 1: MSS offers best combination of growth, superior RoEs & reasonable valuations
FY19
38
31
BJAUT
24
17
EXID
10
15
20
25
PE (x)
HMCL
MSIL
SF *
MSS
SEL *
EIM
TVSL
BHFC
SKF *
BOS
SCHFL *
ENDU
TMKN *
AMRJ
WIL *
30
35
40
Source: Bloomberg, MOSL
Exhibit 2: MSS holding structure
MSS consolidated
FY17 Revenue - INR 424.9b
Adjusted PAT - INR 15.5b
India business (100%)
FY17 Revenue - INR63.5b
Adjusted PAT - INR8.3b
Wiring harness,
Elastomers, Polymer,
Others
PKC (100%)
FY17 Revenue - Euro 852m
Adjusted PAT - Euro 13.7m
SMIL
Promoter owned entity
51%
49%
SMPR BV (51%)
Wiring harness
for CVs & rolling stock
SMP (100%) - Polymers
FY17 Revenue - Euro 2.9b
Adjusted PAT - Euro 28m
SMR (100%) - Mirrors
FY17 Revenue - Euro 1.6m
Adjusted PAT - Euro 47m
Exhibit 3: MSS–Revenue mix based on economic interest (%)
MSS
10
43
23
0
24
FY17
PKC
SMR
SMP
Others
9
31
14
22
23
FY20E
Source: Company, MOSL
Exhibit 4: MSS – EBITDA mix based on economic interest (%)
MSS
12
24
21
0
43
FY17
PKC
SMR
SMP
Others
8
32
14
16
30
FY20E
Source: Company, MOSL
29 December 2017
5

Story in charts
Exhibit 5: Strong recovery in US class 8 trucks to benefit PKC
North America Class 8 Build
254
275
243
293
319
224
250
277
313
Exhibit 6: PKCs addressable market have increased 2x
Truck
APAC truck
Agriculture
Rolling stock
Construction
Aerospace
2.0
2.0
0.7 0.2
1.5
1.5
CY15
1.0
0.7 0.2
1.5
1.5
Now
Source: Company, MOSL
Bus
Source: Company, MOSL
Exhibit 7: PKC’s market share in China HD wiring harness
Pre Huakai JV
15
10
5
2
Heavy Duty (%)
0
0
Medium Duty (%)
Source: Company, MOSL
Post Huakai JV
Post JAC JV
Exhibit 8: PKCs rolling stock revenues to grow at 21% CAGR
Rolling stock (EUR m)
113
74
124
136
FY17E
FY18E
FY19E
FY20E
Source: Company, MOSL
Exhibit 9: SMRPBV has strong order book
Orderbook (Euro bn)
3.1
2.5
3.4
Book to bill (x)
2.8
3.3
Exhibit 10: Growth to be driven by recently added plants
SMRP BV - Capex (EUR m)
319
218
149
231
121
7.7
FY14
10.8
FY15
13.5
FY16
12.9
FY17
15.2
1HFY18
FY14
FY15
FY16
FY17
1HFY18
Source: Company, MOSL
Source: Company, MOSL
Exhibit 11: Beyond 2020 - Motherson group targeting areas beyond autos
Source: Company, MOSL
29 December 2017
6

Sector Update | 28 December 2017
Automobiles
Auto retails weak in certain markets; rural sales healthy
Steep increase in discounts in CVs ahead of regulatory change in Jan-18
2W demand remains mixed, as the momentum gained from the wedding season in the
northern belt is partially negated by muted sales in Rajasthan, Gujarat and
Maharashtra. HMCL witnessed strong demand for motorcycles during the recently
concluded wedding season in north.
PV retails are picking up, driven by the year-end discounts and the rush to beat price
increases from January. MSIL continues to see better retails than competitors: S-cross
bookings stand at ~12k units, with a waiting period in excess of 4 weeks.
CV players are offerings steep discounts (~5% higher) and other incentives to clear the
current stock ahead of the upcoming regulatory change that makes it mandatory for
all new CVs to have air blowers (for better ventilation in the cabin) as a standard
fitment from 1st January 2018.
We prefer 4Ws over 2Ws and CVs due to stronger volume growth and a stable
competitive environment. Our top picks in autos are MSIL, Bajaj Auto, Tata Motors
and Amara Raja.
2Ws: Weak retails in Rajasthan, Gujarat and UP due to inauspicious period
Mr. Rakesh Srivastava,
Director - Marketing and
Sales,
Hyundai India,
said
“We foresee closing this
calendar with cumulative
retail sales of 200,000 units
in the last four months and
are cautiously optimistic of
recording double-digit
growth for the entire fiscal
year driven by improving
macro-economic factors,
stable interest rates and
booming rural markets.”
Retail demand for 2W was seasonally weak, as the Kharmas period (inauspicious
days) hurt sales in the markets of Rajasthan, Gujarat and certain regions in UP.
However, we note that off-take remains relatively good in other western
markets like Maharashtra, and southern markets like TN, Karnataka and AP.
We also note the growth rate in rural markets continues to be healthy, led by an
improvement in rural sentiment and better crop realization (of onion, cotton,
mustard, sugar cane, etc.).
Rural growth led by positive rural sentiment, increase in farm income
Channel partners of most 2W/4W OEMs have indicated a continued increase in
footfall of rural customers.
Key rural-centric markets like Rajasthan, Maharashtra, Gujarat, UP and MP are
witnessing a continued increase in inquiries and conversions, led by the
improving cash situation of farmers.
Our interaction with the channel partners indicates that central, west and north
India have witnessed better demand than other regions, primarily led by
imrproved rural sentiment on better farm income.
Based on our interaction, we note that sales related to the wedding season have
been healthy in December.
Growth should also be driven by a low base of the previous year (November
onward sales last year were impacted by demonetization).
29 December 2017
7

MSIL retails growing at 10-12%, indicating price hikes from Jan’18
Mr. Y S Guleria,
SVP - Marketing and Sales,
HMSI,
said
“While becoming the first
choice of the progressive
states, the next wave of
demand growth for Honda
is coming on the back of
increasing scooterization of
traditionally motorcycle-
driven states. Be it Uttar
Pradesh, Rajasthan, West
Bengal, Bihar, Odisha,
Jharkhand or Chhattisgarh,
scooters are the fastest
growing segment in these
states.”
Growth in PV demand is relatively good v/s 2W, as MSIL’s retails momentum
remains healthy across markets. Retails are healthy due to seasonal higher
discounts and the rush to avoid price increases from January.
Response to the recently refreshed S-cross remains encouraging, with a waiting
period of 4-6 weeks. Bookings at the pan-India level (as indicated by one of the
channel partners) are approaching 12-13k units (v/s average monthly
wholesales of ~2.1k in FY18 YTD). The waiting period for Baleno and Brezza is
still healthy at 4-7 weeks, while Dzire is now largely available off-the-shelf due
to an increase in supplies of the new Dzire.
Ciaz sales are recovering back to normal levels in markets like Tamil Nadu. Ciaz
demand is better than HMIL’s
Verna.
Non-Nexa models are also witnessing retail growth of 8-10%. Channel partners
in rural areas are indicating retails in excess of 12-14%.
As indicated by most of the channel partners, MSIL is considering price increase
from Jan-2018.
Channel partners indicated that with rural demand coming back, there have
been increasing inquiries for the entry-level motorcycle segment in rural areas.
Motorcycle sales in key agriculture-driven states like UP, Bihar, MP and
Rajasthan grew 29%, 17.4%, 22.7% and 10.5%, respectively, in 1HFY18.
As indicated by the leading channel partners, despite HMSI being aggressive in
pushing scooter products, the company has not managed to crack rural markets
due to strong brand recall of Hero and preference toward motorcycles.
However, HMSI is targeting healthy growth in scooters in these states.
HMCL too is offering cash back of INR1,500 per unit (v/s HMSI’s and TVSL nil
cash back) to gain market share in the scooter segment.
Healthy motorcycle growth in agri-driven states
Higher discounts in CVs in a bid to clear inventory and gain market share
Our interaction with the CV channel partners indicates an increase in retails for
M&HCV, led by the likely impact of pre-buy due to the upcoming regulation that
makes it mandatory for all new CVs to have air blowers (for better ventilation in
the cabin) or AC as a standard fitment from 1
st
January 2018.
Discounting continues to remain high and rise sequentially, as volumes push to
gain market share continues.
Segmentally, tippers and road construction, mining applications trucks are
witnessing better demand.
Seasonal freebies/discounts in other segments too to clear inventory
HMCL is offering cash discount of INR1,500 per unit on scooters range, while
TVSL and HMSI are not giving cash discounts on any models.
Bajaj Auto is extending two-year free insurance on all its products, as retails are
relatively mild.
On the PV front, MSIL is offering incentives in the form of exchange bonus/gift
cheque across models (except new launches), which is in the range of INR35-50k
per unit.
29 December 2017
8

Valuation and view
We prefer 4Ws over 2Ws and CVs due to stronger volume growth and a stable
competitive environment.
While we expect 2W volumes to benefit from a rural recovery in the near term,
competitive intensity remains high in the segment due to changing customer
preferences.
Our top picks in autos are MSIL, Bajaj Auto and Tata Motors.
We also consider MM as the best bet on a rural market recovery.
In the 2W space, we have
Buy
rating on BJAUT and EIM, and
Neutral
on HMCL
and TVSL.
Comparative valuations
CMP
(INR)
Auto OEM's
Bajaj Auto
Hero MotoCorp
TVS Motor
M&M
Maruti Suzuki
Tata Motors
Ashok Leyland
Eicher Motors
Auto Ancillaries
Bharat Forge
Exide Industries
Amara Raja Batteries
BOSCH
Endurance Tech
3,301
3,714
763
750
9,631
418
118
29,952
731
219
846
20,064
1,368
Rating
TP
(INR)
4,197
3,819
764
839
9,866
575
134
34,653
844
254
856
19,965
1,334
P/E (x)
FY19E FY20E
17.6
19.1
29.5
17.4
25.3
6.5
18.9
28.2
28.1
22.6
24.8
33.3
37.3
15.2
17.4
21.9
15.7
21.5
6.1
14.3
22.4
21.7
18.8
20.2
27.6
28.2
EV/EBITDA (x)
FY19E FY20E
13.4
12.1
19.3
13.4
16.5
2.8
9.6
23.6
16.8
13.6
12.5
20.5
18.1
11.2
10.9
14.4
11.8
14.3
2.4
7.3
19.4
13.5
11.5
10.2
16.9
14.6
RoE (%)
FY19E FY20E
26.8
31.1
35.6
14.6
23.0
28.3
25.2
35.0
23.2
13.7
18.1
18.1
22.8
27.3
29.7
35.8
14.9
22.9
23.1
28.2
33.2
25.0
14.8
19.1
19.5
25.2
Div Yield (%) EPS CAGR (%)
FY19E FY20E
FY18-20E
2.3
2.4
0.5
1.3
1.0
0.1
1.9
0.6
0.7
1.0
0.6
1.0
0.5
2.6
2.4
0.7
1.3
1.2
0.1
2.1
0.7
0.9
1.5
0.8
1.2
0.9
18.2
7.9
52.9
12.4
24.7
67.0
35.3
27.5
32.8
21.1
21.8
26.1
32.6
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
29 December 2017
9

Update | 29 December 2017
Telecom
RJio agrees to buy RCom’s wireless assets
Acquisition at premium value due to strategic value of the assets
Reliance Jio, the telecom arm of Reliance Industries (RIL), has entered into an
agreement with Reliance Communications (RCOM) to buy the latter’s India wireless
assets.
While the deal size has not been disclosed, RCOM, in its press release on
26
th
December 2017, had announced plans to generate ~INR250b from its India
wireless assets. This, in our view, could be indicative of the sale value.
RJio’s estimated capex for 2HFY18 to increase to INR400b (~10% of capital
employed) from INR200b:
For RJio, we had built in capex of INR200b for 2HFY18,
which may now be revised upward by INR100-200b, assuming 40-50% organic
capex. This should take RJio’s total capital employed to INR2,500b by FY18, as
against INR2,300b estimated previously.
Assets to be acquired include:
122.4 MHz of 4G spectrum in the 800/900/1,800/2,100 MHz bands (valued at
INR120b)
Over 43,000 towers (valued at ~INR60-80b @INR1.5m/tower replacement cost)
~1,78,000 RKM of fiber (valued at INR60-70b)
248 media convergence nodes (covering ~5m sq.ft.) used for hosting telecom
infrastructure
Acquisition at premium value due to strategic value of the assets
We note that Bharti had announced to acquire Tata Teleservices’ (TTSL) consumer
telecom business for INR20b, which includes 71 MHz in the 2,100/1,800 MHz bands.
TTSL’s revenue potential stands at INR50-60b (after factoring in 30-35% revenue
dilution). In comparison, RJio has agreed to pay ~6x for 122 MHz spectrum (valued
at ~INR120b), and additional ~INR120b toward the towers and fiber assets. We
believe that the assets remain strategic to RJio (as it is already utilizing RCom’s
spectrum, tower and fiber resources), and thus, command a premium compared to
the recent assets acquired by Bharti.
RCOM – additional INR200b required for debt repayment
RCOM’s FY17 annual report indicated debt of INR490b, of which INR33b was
deferred payment liability toward spectrum. RCOM’s recent press release indicated
debt of INR450b, but it remains to be ascertained if that includes deferred payment
liability.
Besides INR250b to be generated via telecom assets sale, RCOM management also
mentioned that its debt resolution plan includes the strategic stake sale of INR140b
in the real estate/enterprise business. It will continue to service the remaining
INR60b debt via estimated enterprise EBITDA of INR14b (4.2x net debt to EBITDA).
29 December 2017
10

Exhibit 1: Debt repayment plan, according to management
Particulars
India wireless assets
Real estate (DAKC and others)
Strategic investor
INR b
250
100
40
Comments
Management guidance
Management guidance
Enterprise biz to see strategic stake sale as per mgmt. We
think to the extent of INR40b
Debt to remain in rest of the enterprise biz as per mgmt
Enterprise biz
60
Total Debt
450
* FY17 debt (according to annual report) at INR490b, including deferred payment liability
Source: Company, MOSL
Exhibit 2: Valuation - RCOM post asset monetization
Particulars
Enterprise EBITDA
EV/EBITDA (x) (Based on TCOM valuation)
Enterprise Value
Debt (allocated for enterprise biz)
Equity Value
Equity to strategic investor
Net equity value for current shareholder
INR b
14
8x
112
60
52
40
12
Source: Company, MOSL
29 December 2017
11

Sector Update | 29 December 2017
Technology
Universal Exchanges license: Effective from October 2018
THE NEWS: Stocks, commodities to trade on single exchange from October
2018
The Securities and Exchange Board of India (SEBI) on Thursday announced much-
awaited integration of stocks and commodities trading on a single exchange from
October next year. A two-phase integration of trading in commodity derivatives
market with other segments of securities market at the exchange level was
discussed and approved in SEBI’s board meeting.
Click here
WHAT IT MEANS? More competition on commodity derivatives
The move would help BSE and NSE launch their commodity trading platforms.
Currently, commodity derivatives are traded on MCX and NCDEX. Likewise, the
move also allows MCX to offer trading platforms for other asset classes such as
equities and currency. Thus, this would allow all exchanges to do stocks as well as
commodities trade from October 2018.
WHAT CHANGES? Not much, development on expected lines
In his budget for 2017-208, Finance Minister Arun Jaitley had proposed that the
commodities and securities derivative markets would be integrated further by
integrating the participants, brokers and operational frameworks. Following the
same, SEBI had been citing that circular around Universal License will be out before
the end of this fiscal, and hence the development is on expected lines.
WHAT IT MEANS FOR OUR VIEWS ON MCX, BSE: Potential overhang from
loss of share fears at MCX
Fears of competition in the commodity derivatives segment and consequent loss
of market share for MCX have been around for a while. One aspect that could
have made a case for NSE’s advantage in commodities apart of Universal
Exchanges was margin fungibility. But NSE CEO Vikram Limaye cited that
margining will be different for commodities and equities. As a result, there are
little obvious reasons for liquidity to shift.
That said, expect both NSE and BSE to come aggressively chasing the segment,
which may compel MCX to respond with some discounts of their own, at least in
the initial phases. We believe the period for which MCX would have exclusivity
in commodity options will be a key determinant of its ability to guard the
market. As the guidelines stand, it will take longer for new competition to
qualify to launch option contracts. Any change in the current guideline by SEBI
to allow Options for NSE and BSE quicker is a risk in our view.
29 December 2017
12

In conversation
1. MARICO: See recovery in both urban, rural demand; volume
growth to be better in 2018; Harsh Mariwala, CMD
Company is one of the lowest cost producers in the western market.
Current EBITDA per tonne is Rs 1,000 and current capacity utilisation is between
75 percent and 80 percent. Cannot comment on margin and forward projections
on EBITDA per tonne.
Currently, Gujarat constitutes nearly 85-90 percent of sales.
Focus is to grow organically as it comes at a substantially lower capex. However,
cannot comment on funding of expansion or on qualified institutional
placement (QIP).
2. AU SMALL FINANCE: Expect loan growth to remain at 30-35%;
Sanjay Agarwal, MD & CEO
Retail franchise of the deposit side doing well.
Cost of funds have declined by 200 bps year-on-year (YoY).
Yet to figure out markets for expansion.
Expect gross non-performing asset (NPA) to slip below 3 percent in the coming
quarters.
Expect loan growth to remain at 30-35 percent.
3. CITY UNION BANK: Loan book to grow 15-18% in’18; slippage
ratio at 1-1.5% in 1-2 yrs; N Kamakodi, MD & CEO
As guided earlier, the bank expects the loan book to grow between 15-18
percent in FY18 and between 18-20 percent in FY19.
Regarding NIM, margins for the past 50 quarters have remained in the range of
3.5 to 3.7 percent but in the last few quarters it has been in the range of above 4
percent due to non-participation of PSU banks.
So going forward margins are expected to contract because typically, in a lower
interest rate cycle, margins contract and in a higher interest rate cycle they
expand. As of now they are high.
Fortunately the bank has had no exposure to large ticket corporate loans and
have exposure to one NCLT case, which has been recognized and fully provided
for.
Moreover, the slippage ratio is also on a downward trend with bulky issues in
NPAs now over. So expect the ratio between 1-1.5 percent over next 1-2 years.
4. NSE: Would be ready to start commodities biz by oct’18 if
convergence allowed; Vikram Limaye, CEO
If stock and commodities exchange convergence allowed, will be a positive
move and will allow stock exchanges to start commodity bourses.
Would definitely like to venture into commodities if permitted.
Once commodities exchange is launched, definitely hope to get a significant
market share.
Move will allow an investor to have one account but the margin that one would
have to put up for different asset classes would be different.
29 December 2017
13

One would want any exchange platform to trade all asset classes. Moreover, it
would give members flexibility and it consolidated liquidity.
Market share in currency trading is north of 60 percent.
If permission is granted by SEBI then would be ready to start it by October but of
course there would be a process to follow before that
5. STAR CEMENT: Expect 5% volume growth in FY18 & 15% for
FY19; Sanjay Gupta, CEO
Received subsidy of Rs 230 crore in the current year.
Expect Rs 150-200 crore more subsidy in the next quarter.
Long-term debt seen at Rs 275 crore post receiving subsidy.
Freight subsidy will go away from January 2018.
Expect EBITDA per tonne to be at Rs 1,900-2,000 in the next year.
Expect 15 percent volume growth in FY19 and 5 percent in FY18.
29 December 2017
14

From the think tank
1. RERA will rebalance the builder-buyer equation
The year 2017 started on a rather cautious note for the domestic real estate
industry. The sector had already been witnessing demand headwinds since the
past few years, which got further compounded with the demonetization drive in
November 2016, leading to negative consumer sentiments as prospective buyers
deferred purchase decisions in the expectation of sharp correction in housing
prices. It took some time for customer confidence on the pricing stability to build
up, thereby negatively impacting sales during this period. Just as the impact of
demonetization was seen to be receding by the middle of 2017, the Real Estate
Regulation and Development Act (RERA) with full provisions was implemented
from 1 May 2017, and subsequently the Goods and Service Tax (GST) became
applicable from 1 July 2017, resulting in the buyers continuing to adopt a wait and
watch approach. This further curtailed sales volumes of the developers.
2. The 2G verdict and opposition unity
Picture a high-profile case on a matter that has captured the nation’s
imagination. Irrespective of the truth, the case has to be decided on the basis of
the evidence presented. Only the government-led prosecution knows whether
the evidence is strong or weak. All opposition parties can observe is the
assiduousness with which the prosecution pursues the case, and the final result.
In response, they can initiate a mass movement against the government or
accept the verdict with equanimity. In this game model, we focus on opposition
parties other than the Congress. The outcome of the trial is dependent on the
strength of the evidence, and the assiduousness of the prosecution. For the
government, a win would seem to be better than a loss, although a loss may
allow the ruling party to seek the favour of one of the defendants.
3. Global trade: Back to the drawing board
The outcome of the 11th ministerial meeting of the World Trade Organization
(WTO) at Buenos Aires was on predictable lines. The writing has been on the wall
for a long time now. Some serious efforts were made to revive Doha Round
negotiations between 2008 and 2011; thereafter, these efforts could succeed only
in bringing up selected issues for negotiations in one after the other ministerial
meetings. International organizations are adept at creating hype around what they
do, howsoever little that may be. The Bali ministerial in 2013 was unique as it
showed how the fear of failure forced leadership on all sides to agree on some
outcome. But those were the Barack Obama days. The new dispensation in the US
is not that charitable to multilateralism. Bali was followed by India’s dramatic
reassertion for resolution on the public stock holding issue, linking it with the
implementation of the trade facilitation agreement.
29 December 2017
15

4. 2017: The year that was in media
It was an important year for media in India. Several changes in the broadcast
landscape stood out. Some of the more important developments took place in the
second half of the year. The biggest one, in fact, was saved for the last which would
change the ranking order of television broadcasters in the country. In December,
media mogul Rupert Murdoch announced the mother of all media deals with Walt
Disney Co., which agreed to buy parts of Murdoch’s 21st Century Fox Inc. for about
$52.4 billion in stock. The deal has far-reaching implications for India, where his
media empire would merge with Disney. In this market, Murdoch has a presence
through Star India Pvt. Ltd that operates close to 60 television channels. The deal
implies that these channels as well as the company’s digital streaming platform
Hotstar would be absorbed by Disney. Besides, Disney would also acquire Star’s
stake in the direct-to-home platform Tata Sky. While the deal is likely to take about
12-18 months, it would make Disney the biggest broadcaster in India.
International
5. The new fulcrum of the middle east
We live in a time of geopolitical transition. China’s effort to replace the United
States as the world’s leading power, or at least to become a co-partner in global
leadership, deservedly receives much attention. But the macro-level dynamics
that have long defined the Middle East are also shifting, and here, too, US
influence is likely to diminish. Just over a century ago, the Sykes-Picot
Agreement divided the Middle East between France and Great Britain, and
established national borders that remain in place to this day. But now the
regional order is changing. Since Israel’s founding, the Arab-Israeli conflict has
largely dominated the region’s geopolitics. Israel won the first Arab-Israeli War
in 1948 and all the wars that followed it. But whether the Israelis and the
Palestinians could reach an acceptable settlement, and thus bring peace to the
Middle East, remained a central concern in international affairs.
29 December 2017
16

Click excel icon
for detailed
valuation guide
CMP
(INR)
TP
(INR)
% Upside
EPS (INR)
Downside FY18E FY19E FY20E
1
14
27
15
0
9
16
-2
-11
16
3
10
15
2
37
0
28.3
34.2
41.9
4.5
6.2
8.2
155.4 187.9
217.2
19.1
26.0
33.7
457.8 603.0
727.9
82.5
116.9
140.6
814.7 1,062.7 1,334.6
27.6
36.7
48.5
35.8
45.9
57.6
7.9
9.7
11.7
183.1 193.9
213.3
37.8
43.2
47.7
8.9
11.5
14.5
288.1 381.0
447.8
24.6
64.8
68.6
14.9
25.8
34.9
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY19E FY20E FY19E FY20E FY19E FY20E
24.8
18.9
17.6
28.1
33.3
16.7
28.2
37.3
16.8
22.6
19.1
17.4
22.5
25.3
6.5
29.5
17.0
17.8
18.5
25.9
16.4
22.1
18.5
16.8
21.0
9.1
24.2
22.0
8.2
13.4
19.6
7.2
18.5
11.9
8.6
12.6
11.5
24.5
11.6
34.0
27.5
21.0
15.8
18.2
12.8
41.7
29.7
70.5
11.4
16.7
12.1
20.2
14.3
15.2
21.7
27.6
13.9
22.4
28.2
13.4
18.7
17.4
15.7
17.9
21.5
6.1
21.9
14.9
13.6
15.2
15.0
13.3
17.8
14.4
16.2
16.4
5.8
19.3
16.5
6.3
10.6
15.4
5.5
9.6
5.8
7.5
10.7
8.6
7.5
8.4
23.8
20.2
15.4
12.2
15.0
10.5
33.3
25.7
56.3
9.1
13.5
10.3
4.8
5.1
5.0
7.1
6.4
2.9
11.5
9.3
3.4
3.4
6.4
3.1
2.7
7.0
2.1
12.3
3.9
2.0
2.3
2.2
1.7
4.9
2.4
1.2
4.3
0.8
4.3
3.2
1.1
2.9
2.7
1.0
0.8
0.7
1.2
0.9
1.4
0.5
0.9
4.7
6.2
4.5
2.6
3.9
2.1
15.2
6.1
2.5
3.7
3.4
2.2
4.2
4.4
4.4
6.0
5.7
2.5
8.7
7.8
2.9
3.1
5.6
2.8
2.4
5.9
1.6
9.2
3.2
1.8
2.1
2.0
1.6
4.2
2.2
1.1
3.6
0.7
3.7
2.9
1.0
2.4
2.4
0.9
0.8
0.7
1.0
0.9
1.2
0.5
0.8
3.7
5.2
3.7
2.3
3.3
1.8
12.5
5.0
2.1
3.3
2.9
1.9
17.3
20.4
25.0
20.1
15.2
13.0
35.7
20.5
16.8
12.5
33.7
14.5
9.8
20.5
13.4
26.5
22.8
7.3
11.5
2.6
9.6
18.8
8.8
6.3
16.9
4.0
14.8
12.4
6.7
17.3
13.9
6.4
1.5
3.4
11.6
4.7
7.0
-4.7
7.9
12.5
20.2
15.3
13.2
19.6
14.1
32.8
19.3
20.0
27.6
14.9
17.4
18.1
25.2
26.8
23.2
18.1
16.2
35.0
22.8
18.4
13.7
31.1
14.6
11.4
23.0
28.3
35.6
21.6
10.8
11.8
8.2
10.0
20.4
10.5
6.9
19.0
8.0
16.5
13.7
12.6
19.5
15.4
9.4
4.3
6.1
12.7
7.1
11.4
2.1
10.0
12.3
20.4
19.3
15.4
19.6
15.3
32.8
18.6
19.1
30.7
18.9
17.2
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
CEAT
Eicher Mot.
Endurance Tech.
Escorts
Exide Ind
Hero Moto
M&M
Mahindra CIE
Maruti Suzuki
Tata Motors
TVS Motor
Aggregate
Banks - Private
Axis Bank
DCB Bank
Equitas Hold.
Federal Bank
HDFC Bank
ICICI Bank
IDFC Bank
IndusInd
J&K Bank
Kotak Mah. Bk
RBL Bank
South Indian
Yes Bank
Aggregate
Banks - PSU
BOB
BOI
Canara
Indian Bk
PNB
SBI
Union Bk
Aggregate
NBFCs
Aditya Birla Cap
Bajaj Fin.
Bharat Fin.
Capital First
Cholaman.Inv.&Fn
Dewan Hsg.
GRUH Fin.
HDFC
HDFC Stand. Life
Indiabulls Hsg
L&T Fin Holdings
LIC Hsg Fin
Reco
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Sell
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
846
856
118
134
3,301 4,197
731
844
20,064 19,965
1,949 2,116
29,952 34,653
1,368 1,334
772
688
219
254
3,714 3,819
750
829
259
297
9,631 9,866
418
575
763
764
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
547
194
149
109
1,875
314
54
1,650
79
1,005
508
31
314
680
197
209
146
2,150
355
56
2,000
100
1,179
665
36
382
24
2
41
34
15
13
3
21
27
17
31
16
22
18.4
8.5
1.7
5.5
68.7
13.6
2.8
60.9
4.1
32.1
16.4
1.9
17.8
30.8
10.5
5.7
6.6
84.7
17.0
3.2
78.6
8.7
41.6
23.0
3.8
23.3
40.2
12.8
9.9
8.2
105.4
21.8
3.4
100.8
13.6
51.9
30.8
4.9
29.5
Buy
Neutral
Neutral
Buy
Buy
Buy
Neutral
163
170
361
380
171
308
146
201
201
386
438
250
415
175
24
18
7
15
46
35
20
17.9
3.2
16.1
36.7
8.5
14.6
-13.5
22.6
9.2
30.3
44.0
13.5
26.8
6.0
29.7
17.7
62.1
50.8
16.0
35.8
19.5
Buy
Buy
Under Review
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
185
1,755
994
691
1,285
587
503
1,695
379
1,199
174
562
231
2,300
-
925
1,500
690
500
2,000
370
1,550
240
680
25
31
34
17
18
-1
18
-2
29
38
21
3.7
45.7
30.3
32.8
59.2
37.6
9.9
51.6
4.7
83.6
6.9
41.0
5.4
63.7
47.2
43.7
70.4
46.0
12.0
57.1
5.4
105.1
10.4
46.5
7.8
87.0
64.6
56.5
85.9
56.0
15.1
66.0
6.7
131.1
12.9
54.5
29 December 2017
17

Click excel icon
for detailed
valuation guide
CMP
(INR)
468
475
1,313
680
2,039
1,457
TP
(INR)
562
550
1,750
750
2,650
1,500
% Upside
EPS (INR)
Downside FY18E FY19E
20
13.5
18.7
16
42.6
42.0
33
52.5
66.5
10
36.0
41.9
30
115.6 145.3
3
15.5
11.8
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY19E FY20E FY19E FY20E FY19E FY20E
25.1
20.3
3.2
2.9
10.7
12.2
11.3
9.9
2.4
2.1
23.8
19.9
19.7
14.8
3.5
3.1
15.0
16.7
16.2
13.6
3.2
2.7
18.1
17.9
14.0
11.7
2.4
2.1
14.3
15.9
123.8 150.9
2.6
2.2
15.1
17.4
22.3
18.1
3.9
3.4
17.6
18.6
48.4
22.5
30.7
33.3
41.2
40.8
26.1
38.3
38.5
20.9
23.1
40.0
37.8
34.7
16.7
33.4
28.4
32.3
24.6
19.9
38.5
9.7
17.1
17.8
22.6
22.6
18.5
22.8
17.8
15.9
35.9
29.1
22.7
44.3
43.8
38.6
37.3
39.3
40.1
36.1
49.2
26.0
34.9
40.0
51.8
40.0
21.1
23.5
26.3
34.1
30.9
23.0
30.8
31.1
17.0
19.2
35.1
30.1
32.0
14.8
29.3
23.9
25.9
21.2
18.3
28.8
8.5
14.8
14.0
17.1
17.8
11.0
17.2
11.7
11.8
23.9
23.2
18.2
36.8
34.9
32.1
31.8
33.9
35.8
31.9
41.9
23.0
29.0
33.8
42.9
7.9
4.6
1.0
9.7
22.8
1.4
6.3
9.3
9.3
5.0
3.2
5.7
8.9
4.8
2.9
5.8
3.4
2.7
3.6
2.5
5.2
1.5
1.1
3.7
3.4
4.4
3.1
5.4
2.1
2.5
6.8
4.4
2.9
14.1
17.2
22.0
10.8
14.5
9.8
8.7
45.0
7.0
6.5
15.3
22.4
7.1
4.1
1.0
8.9
18.7
1.3
5.8
8.1
8.2
4.2
2.9
5.2
1.5
4.4
2.6
5.1
3.1
2.5
3.4
2.3
4.6
1.3
1.0
3.1
2.9
3.8
2.7
4.4
1.9
2.2
5.8
3.9
2.6
12.1
13.9
20.6
9.6
12.5
8.6
7.7
41.7
6.4
6.3
14.4
20.1
11.6
17.9
3.3
20.2
51.0
2.1
18.1
21.8
19.5
19.5
12.5
9.1
21.4
12.6
17.5
16.5
11.9
7.0
11.1
7.3
10.3
11.5
3.5
17.5
9.9
16.0
12.3
13.7
6.1
10.8
20.0
11.1
12.9
26.9
34.0
48.8
26.0
31.7
23.8
21.4
75.9
24.4
15.5
33.6
39.0
14.6
18.1
3.3
27.8
49.8
3.3
22.2
22.6
21.2
20.2
13.3
13.1
21.5
13.2
16.4
16.3
12.9
8.0
14.2
12.0
12.7
14.5
6.0
19.2
13.9
17.9
15.6
21.3
11.3
14.6
17.4
14.2
14.2
29.4
35.2
55.2
27.3
34.0
22.9
22.6
88.0
25.6
18.3
37.1
40.9
Company
M&M Fin.
Muthoot Fin
PNB Housing
Repco Home
Shriram City Union
Shriram Trans.
Aggregate
Capital Goods
ABB
Bharat Elec.
BHEL
Blue Star
CG Cons. Elec.
CG Power & Indu.
Cummins
GE T&D
Havells
K E C Intl
L&T
Siemens
Solar Ind
Thermax
Va Tech Wab.
Voltas
Aggregate
Cement
Ambuja Cem.
ACC
Birla Corp.
Dalmia Bharat
Grasim Inds.
India Cem
J K Cements
JK Lakshmi Ce
Ramco Cem
Orient Cem
Prism Cem
Sagar Cements
Sanghi Inds.
Shree Cem
Ultratech
Aggregate
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Cons.
GSK Cons.
HUL
ITC
Jyothy Lab
Marico
Nestle
Reco
Buy
Neutral
Buy
Buy
Buy
Buy
FY20E
23.1
48.1
88.8
50.0
173.7
9.7
Sell
Buy
Sell
Neutral
Buy
Neutral
Buy
Neutral
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
Neutral
1,388
181
92
814
267
93
913
431
550
369
1,253
1,240
1,185
1,194
620
655
1,230
210
78
685
260
90
1,150
440
620
350
1,440
1,313
1,120
930
745
580
-11
16
-15
-16
-3
-3
26
2
13
-5
15
6
-5
-22
20
-11
20.2
7.1
2.9
16.5
5.2
1.4
25.3
9.4
11.5
14.3
46.8
19.8
26.2
29.9
34.5
17.5
28.7
8.0
3.0
24.4
6.5
2.3
35.0
11.2
14.3
17.6
54.3
31.0
31.3
34.4
37.2
19.6
34.7
8.6
3.9
31.0
7.8
3.0
39.6
14.0
17.7
21.7
65.1
35.3
39.3
37.3
41.9
22.4
Neutral
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Not Rated
Buy
Buy
Buy
271
314
1,745 1,797
1,128 1,435
3,220 3,517
1,129 1,302
180
188
1,104 1,324
431
512
794
853
168
205
114
130
843
-
141
157
17,941 21,852
4,276 4,906
16
3
27
9
15
5
20
19
7
22
14
11
22
15
6.9
52.2
32.2
60.8
81.9
5.8
47.8
12.1
27.1
6.3
2.7
23.4
5.8
486.2
102.2
8.4
70.9
56.7
83.7
116.8
10.5
61.8
19.1
35.1
9.1
5.0
47.4
8.9
499.3
147.1
10.5
82.4
61.6
111.7
133.5
12.1
79.1
25.2
44.7
15.2
6.6
72.2
12.0
751.1
184.0
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Neutral
Neutral
Neutral
1,145
4,675
1,082
346
1,307
982
6,588
1,357
261
380
317
7,721
1,280
6,100
1,355
410
1,435
1,015
5,400
1,500
280
365
340
7,750
12
30
25
18
10
3
-18
11
7
-4
7
0
21.6
84.5
23.4
7.7
26.6
21.2
160.8
22.8
9.1
9.2
6.5
128.4
25.8
106.9
28.1
9.3
33.2
24.5
182.3
27.6
10.0
10.9
7.9
149.0
31.1
133.8
33.7
10.9
38.6
27.4
206.5
32.4
11.4
13.1
9.4
180.1
29 December 2017
18

Click excel icon
for detailed
valuation guide
CMP
TP
% Upside
EPS (INR)
(INR)
(INR) Downside FY18E FY19E
25,190 25,580
2
296.6 413.1
290
275
-5
8.9
12.4
903
975
8
17.2
20.8
9,409 9,267
-2
151.5 176.7
213
-
3.5
6.4
1,076 1,320
23
14.7
18.0
3,634 2,970
-18
34.9
53.7
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY19E FY20E FY19E FY20E FY19E FY20E
61.0
46.3
33.8
27.1
39.8
44.4
23.4
17.2
3.3
2.9
10.8
13.3
43.5
37.6
11.5
9.5
24.1
23.9
53.2
44.9
36.8
30.7
64.8
62.9
33.4
21.9
2.9
2.7
4.9
8.5
60.0
48.3
10.7
9.2
15.5
16.5
67.7
49.3
19.0
14.1
18.2
20.9
38.8
33.1
11.4
10.1
29.5
30.5
21.8
24.4
23.1
13.6
53.5
17.9
22.4
25.5
21.1
33.0
13.8
15.1
44.3
22.8
14.0
20.6
30.4
20.3
12.0
24.8
22.6
21.9
34.6
10.1
22.4
28.9
17.6
18.3
20.0
18.7
12.4
29.0
16.1
18.2
21.3
16.9
19.2
11.7
10.4
40.1
18.6
12.0
15.4
26.5
16.1
9.7
20.3
17.7
17.9
15.3
11.9
20.4
24.7
16.4
13.6
20.2
17.3
18.8
21.5
12.0
25.9
23.9
20.0
7.1
7.2
11.0
21.6
24.6
13.6
4.7
5.1
6.7
3.4
6.4
5.2
3.5
5.7
3.2
1.3
3.1
2.5
12.1
2.9
3.0
2.7
5.8
4.6
2.4
3.6
4.8
3.4
2.5
1.4
4.3
3.8
2.1
2.6
3.6
2.5
3.1
15.6
3.4
2.3
4.0
2.8
1.4
0.9
2.8
3.7
6.1
5.7
4.0
4.4
5.3
2.7
5.9
4.2
3.1
5.1
2.8
1.2
2.5
2.2
13.9
2.6
2.5
2.5
5.3
3.8
2.0
3.2
4.2
2.9
2.3
1.2
3.6
3.4
1.8
2.3
3.4
2.4
2.9
11.0
2.9
2.3
3.6
2.7
1.2
0.8
2.4
3.2
5.2
4.5
19.9
17.0
26.4
24.6
7.2
23.4
12.1
16.3
8.2
1.6
19.6
14.2
22.0
9.2
18.4
12.0
17.1
14.7
12.9
9.2
18.3
15.3
1.9
14.1
19.1
13.8
11.7
14.1
11.5
9.2
13.6
12.5
22.8
-6.4
6.3
-1.2
15.0
10.2
17.3
8.6
12.4
15.3
19.8
19.4
25.7
22.3
11.0
26.1
13.6
21.2
14.1
3.9
18.4
15.5
31.4
12.0
19.2
12.5
17.6
20.5
18.3
13.7
19.9
16.3
7.0
12.9
17.5
12.5
11.3
15.4
14.1
11.7
15.4
34.9
22.2
0.2
10.1
5.2
15.3
10.6
19.3
12.6
17.0
24.8
Company
Reco
Page Inds
Buy
Parag Milk
Neutral
Pidilite Ind.
Buy
P&G Hygiene
Neutral
Prabhat Dairy
Not Rated
United Brew
Buy
United Spirits
Neutral
Aggregate
Healthcare
Alembic Phar
Neutral
Alkem Lab
Buy
Ajanta Pharma
Buy
Aurobindo
Buy
Biocon
Neutral
Cadila
Buy
Cipla
Neutral
Divis Lab
Neutral
Dr Reddy’s
Neutral
Fortis Health
Buy
Glenmark
Neutral
Granules
Buy
GSK Pharma
Neutral
IPCA Labs
Neutral
Jubilant Life
Buy
Lupin
Buy
Sanofi India
Buy
Shilpa Medicare
Buy
Strides Shasun
Buy
Sun Pharma
Buy
Torrent Pharma
Neutral
Aggregate
Infrastructure
Ashoka Buildcon
Buy
IRB Infra
Neutral
KNR Constructions Buy
Sadbhav
Buy
Engineering
Aggregate
Logistics
Allcargo Logistics Buy
Concor
Neutral
Gateway Distriparks Buy
Aggregate
Media
Dish TV
Buy
D B Corp
Buy
Den Net.
Neutral
Ent.Network
Buy
Hathway Cable
Buy
Hind. Media
Buy
HT Media
Neutral
Jagran Prak.
Buy
Music Broadcast
Buy
PVR
Buy
Prime Focus
Buy
FY20E
544.5
16.8
24.0
209.4
9.7
22.3
73.6
543
2,186
1,479
685
540
425
605
1,114
2,432
162
593
137
2,431
605
771
881
4,746
608
830
568
1,390
540
2,500
1,792
900
485
555
600
1,100
2,575
185
650
200
2,500
550
861
1,000
5,000
797
1,214
610
1,400
0
14
21
31
-10
31
-1
-1
6
14
10
46
3
-9
12
14
5
31
46
7
1
21.6
68.0
52.7
44.6
6.1
17.5
21.1
32.4
60.6
1.9
37.9
6.9
44.2
18.6
44.2
37.6
139.0
18.1
41.8
14.4
50.0
24.9
89.5
64.1
50.3
10.1
23.7
27.0
43.7
115.2
4.9
42.8
9.1
54.9
26.5
55.0
42.7
156.2
29.9
69.2
22.9
61.4
29.7
109.1
79.2
55.3
18.6
26.4
33.3
52.4
144.0
8.4
50.5
13.2
60.6
32.6
64.4
57.1
179.0
37.8
85.3
28.0
78.5
244
233
326
420
260
240
320
435
7
3
-2
4
1.8
22.9
13.3
14.3
7.1
23.2
14.5
14.5
16.0
19.7
16.0
17.0
208
1,376
243
215
1,496
282
3
9
16
10.9
42.7
8.8
13.3
55.2
11.6
15.3
68.1
14.0
15.7
24.9
20.9
22.8
37.0
14.0
1,459.7
37.9
52.4
8.3
8.2
13.2
27.2
32.8
20.3
82
355
104
762
40
252
98
178
385
1,408
125
106
430
90
910
47
302
113
225
469
1,640
130
30
21
-13
19
18
20
15
27
22
16
4
0.6
21.7
-2.9
11.6
-0.2
25.6
10.4
11.3
8.7
27.1
3.1
2.2
25.4
0.1
20.1
0.8
30.2
11.9
13.4
14.1
43.0
6.1
3.8
29.6
4.0
31.8
2.0
35.6
13.6
16.2
17.8
57.3
9.2
29 December 2017
19

Click excel icon
for detailed
valuation guide
CMP
(INR)
26
1,001
587
TP
(INR)
27
1,005
690
% Upside
EPS (INR)
Downside FY18E FY19E FY20E
6
-0.8
0.1
0.6
0
28.1
35.7
41.8
18
14.4
17.3
20.6
Valuation snapshot
P/E (x)
P/B (x)
ROE (%)
FY19E FY20E FY19E FY20E FY19E FY20E
201.9
39.5
4.8
4.7
-14.2
2.4
28.1
23.9
9.1
8.2
26.4
30.7
33.9
28.4
7.2
6.2
19.1
19.6
27.0
21.3
4.8
4.1
17.9
19.4
10.4
9.3
445.0
10.9
15.0
10.9
29.6
9.3
7.5
11.3
10.1
10.1
16.0
25.0
17.1
9.9
9.2
29.0
20.2
11.2
9.2
8.5
15.0
14.9
11.8
62.4
24.8
53.7
45.2
13.9
12.9
19.8
15.2
12.3
15.3
17.5
15.7
12.9
13.3
23.5
17.4
13.2
15.3
12.0
16.4
82.1
10.3
9.7
49.6
11.9
14.7
10.5
12.1
8.4
7.2
9.7
9.5
9.4
15.2
20.3
14.9
9.3
8.6
25.4
20.0
10.5
8.8
8.8
12.3
13.4
11.1
47.3
19.4
42.9
35.8
12.7
12.4
17.6
13.7
10.1
13.9
14.1
14.2
11.6
11.5
19.5
16.6
11.6
13.9
10.8
15.2
55.8
1.9
4.6
0.6
2.4
1.6
1.8
1.1
3.2
1.9
2.0
1.6
2.8
2.1
6.1
2.5
2.7
1.6
6.6
5.2
2.0
1.0
1.1
3.9
1.8
1.6
13.2
4.7
14.4
9.4
2.8
3.5
5.2
3.7
1.9
5.5
3.9
2.8
2.2
2.7
8.5
6.3
2.5
2.8
2.4
3.8
3.1
1.6
3.5
0.6
2.0
1.5
1.7
1.1
2.4
1.7
1.7
1.4
2.4
1.9
5.1
2.3
2.3
1.5
5.6
4.7
1.8
0.9
1.0
3.3
1.6
1.4
13.1
4.1
13.1
8.5
2.5
3.1
4.3
3.3
1.7
4.3
3.5
2.6
2.0
2.6
6.9
5.4
2.2
2.4
2.1
3.4
3.0
13.6
32.3
-4.7
19.8
8.6
17.8
-5.0
25.2
15.1
17.1
16.2
25.2
12.0
17.8
14.4
25.1
15.8
22.0
27.3
15.1
8.0
10.8
25.2
12.1
13.4
16.5
16.5
23.4
20.9
17.4
25.9
26.4
21.8
14.1
35.6
17.3
14.6
15.1
17.9
33.6
30.6
18.9
17.0
15.3
23.2
2.2
16.5
42.5
0.1
20.2
10.1
15.9
3.7
29.7
23.8
16.6
15.2
25.8
12.6
22.1
14.0
25.0
16.6
21.0
24.4
16.7
10.4
12.4
23.7
12.0
13.0
20.9
17.5
25.5
23.8
18.3
25.6
23.4
22.5
14.5
31.8
21.2
17.3
16.4
20.8
32.4
33.5
18.2
16.7
18.4
22.5
3.7
Company
Siti Net.
Sun TV
Zee Ent.
Aggregate
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
SAIL
Rain Industries
Vedanta
Tata Steel
Aggregate
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
Mahanagar Gas
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Aggregate
Retail
Jubilant Food
PC Jeweller
Titan Co.
Aggregate
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Aggregate
Telecom
Bharti Airtel
Reco
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Sell
Buy
Buy
Neutral
275
311
202
271
86
138
93
362
333
735
326
322
209
297
87
187
43
492
394
672
18
4
3
9
1
35
-54
36
18
-9
18.8
22.7
-15.1
20.3
4.7
13.2
-4.3
25.5
25.5
59.4
26.4
33.5
0.5
24.9
5.8
12.7
3.1
38.9
44.4
65.2
26.9
32.1
4.1
22.9
5.9
13.2
7.6
43.0
46.3
75.8
Buy
Sell
Buy
Neutral
Buy
Buy
Buy
Neutral
Sell
Buy
Buy
Buy
Buy
525
511
839
225
422
392
329
1,090
129
374
193
251
924
643
378
1,011
184
579
541
404
1,219
110
418
227
312
1,077
23
-26
21
-18
37
38
23
12
-15
12
18
24
17
43.1
28.1
22.9
12.1
36.4
36.2
10.0
54.4
9.2
29.8
19.1
15.0
56.7
52.1
31.9
33.6
13.2
42.8
42.6
11.3
53.8
11.5
40.5
22.7
16.7
62.1
55.6
33.6
41.3
15.2
45.6
45.6
12.9
54.5
12.3
42.4
21.9
20.3
69.1
Sell
Buy
Buy
1,712
457
852
1,270
490
850
-26
7
0
21.4
15.1
12.5
27.4
18.4
15.9
36.2
23.5
19.9
Buy
Neutral
Neutral
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Neutral
Buy
Neutral
Buy
581
878
338
1,034
173
1,096
614
721
650
697
945
2,629
498
308
873
600
970
270
1,100
160
1,200
600
670
600
780
1,004
2,450
560
280
1,020
3
10
-20
6
-8
10
-2
-7
-8
12
6
-7
12
-9
17
36.0
63.2
16.3
63.8
11.9
62.4
28.5
42.0
43.7
43.3
33.8
131.8
35.8
19.1
52.8
41.9
68.2
17.0
67.8
14.1
71.8
35.1
46.0
50.3
52.4
40.2
151.4
37.7
20.1
72.7
45.9
70.6
19.2
75.7
17.1
78.9
43.5
50.6
56.1
60.8
48.4
158.4
43.1
22.1
80.9
Buy
531
680
28
3.8
6.5
9.5
29 December 2017
20

Click excel icon
for detailed
valuation guide
CMP
(INR)
368
102
680
TP
(INR)
440
110
780
% Upside
EPS (INR)
Downside FY18E FY19E
20
16.8
19.2
8
-16.1 -18.0
15
5.4
18.2
Valuation snapshot
Company
Reco
Bharti Infratel
Neutral
Idea Cellular
Buy
Tata Comm
Buy
Aggregate
Utiltites
Coal India
Buy
CESC
Buy
JSW Energy
Sell
NHPC
Buy
NTPC
Buy
Power Grid
Buy
Tata Power
Sell
Aggregate
Others
Arvind
Neutral
Avenue Supermarts Sell
Bata India
Sell
BSE
Neutral
Castrol India
Buy
Coromandel Intl
Buy
Delta Corp
Buy
Eveready Inds.
Buy
Interglobe
Neutral
Indo Count
Neutral
Info Edge
Buy
Kaveri Seed
Buy
Manpasand
Buy
MCX
Buy
Monsanto
Buy
Navneet Education Buy
Oberoi Realty
Buy
Quess Corp
Buy
PI Inds.
Buy
Piramal Enterp.
Buy
SRF
Buy
S H Kelkar
Buy
Team Lease Serv. Buy
Trident
Buy
TTK Prestige
Neutral
V-Guard
Neutral
FY20E
21.1
-14.3
32.8
P/E (x)
P/B (x)
ROE (%)
FY19E FY20E FY19E FY20E FY19E FY20E
19.2
17.4
4.4
4.3
20.2
22.8
NM
NM
1.9
3.0
-26.6 -41.4
37.4
20.7
13.2
9.8
10.1
30.0
2,107.3 97.1
3.4
3.4
0.2
3.5
12.7
10.2
27.2
10.3
11.2
9.8
12.3
11.5
27.2
65.7
38.6
20.1
29.0
19.4
37.9
25.4
16.0
11.7
49.8
13.4
28.6
23.9
19.4
15.6
13.0
34.6
26.9
19.0
18.5
30.2
38.4
8.5
44.1
39.9
10.7
9.4
24.5
8.7
9.9
9.3
11.8
10.1
19.3
47.6
33.1
17.0
28.0
18.6
29.5
20.0
11.1
10.1
42.9
11.4
21.5
20.1
16.4
13.2
11.1
25.4
23.7
15.1
14.6
24.7
28.6
7.1
38.2
35.5
6.4
1.2
1.4
1.1
1.4
1.8
1.9
1.8
3.1
16.4
6.4
1.9
29.2
4.9
5.1
8.9
7.1
2.4
7.2
3.9
4.1
3.6
7.2
4.7
2.5
6.2
6.8
3.1
3.2
4.8
9.3
1.5
9.7
12.9
6.1
1.1
1.4
1.1
1.3
1.6
1.7
1.7
2.9
13.9
5.7
1.6
26.6
4.2
4.6
7.2
6.7
2.0
6.5
3.4
3.7
3.3
6.2
4.0
2.2
5.3
5.7
2.8
2.8
4.3
7.5
1.3
8.6
10.3
42.4
10.7
6.3
8.4
11.0
17.0
16.0
16.1
7.4
18.2
14.6
9.3
100.3
22.5
12.1
32.1
46.8
17.0
13.7
23.3
8.4
10.0
32.5
26.3
13.9
24.2
23.0
11.7
13.2
11.3
17.7
14.5
18.0
26.9
47.7
11.1
5.0
10.8
11.9
17.4
14.6
16.8
10.9
22.9
15.7
8.0
96.1
23.4
12.9
31.5
43.0
18.5
13.7
27.4
13.5
14.4
34.5
27.9
17.8
16.4
22.9
15.3
16.3
15.1
21.5
16.1
20.7
28.8
263
1,046
89
32
176
199
92
335
1,360
49
37
211
261
72
27
30
-45
16
20
31
-22
17.5
89.1
4.0
2.4
13.4
17.4
7.3
20.7
102.1
3.3
3.1
15.7
20.4
7.5
24.6
110.7
3.6
3.7
17.8
21.3
7.8
448
1,146
743
925
193
563
305
442
1,208
125
1,307
549
439
938
2,456
162
471
1,133
957
2,843
1,944
293
2,465
89
7,766
237
425
873
578
1,100
234
523
257
400
1,291
128
1,300
738
492
1,300
3,293
209
580
1,170
890
3,266
1,992
301
2,500
114
5,281
167
-5
-24
-22
19
21
-7
-16
-10
7
2
-1
35
12
39
34
29
23
3
-7
15
2
3
1
28
-32
-30
10.5
12.0
15.9
45.3
6.3
24.1
5.7
14.3
63.2
8.0
23.6
34.1
9.9
26.5
105.0
8.4
24.8
31.1
29.9
104.6
76.7
6.6
43.2
8.3
137.8
4.5
16.5
17.5
19.3
46.1
6.7
29.0
8.0
17.4
75.4
10.7
26.2
41.0
15.4
39.2
126.6
10.4
36.2
32.7
35.6
149.7
104.9
9.7
64.2
10.4
176.1
6.0
23.2
24.1
22.4
54.5
6.9
30.3
10.3
22.1
109.1
12.4
30.5
48.1
20.5
46.8
149.9
12.3
42.3
44.5
40.3
188.7
132.7
11.8
86.3
12.6
203.2
6.7
29 December 2017
21

MOSL Universe stock performance
Company
Automobiles
Amara Raja
Ashok Ley.
Bajaj Auto
Bharat Forge
Bosch
CEAT
Eicher Mot.
Endurance Tech.
Escorts
Exide Ind
Hero Moto
M&M
Mahindra CIE
Maruti Suzuki
Tata Motors
TVS Motor
Banks - Private
Axis Bank
DCB Bank
Equitas Hold.
Federal Bank
HDFC Bank
ICICI Bank
IDFC Bank
IndusInd
J&K Bank
Kotak Mah. Bk
RBL Bank
South Indian
Yes Bank
Banks - PSU
BOB
BOI
Canara
Indian Bk
PNB
SBI
Union Bk
NBFCs
Aditya Birla Cap
Bajaj Fin.
Bharat Fin.
Capital First
Cholaman.Inv.&Fn
Dewan Hsg.
GRUH Fin.
HDFC
HDFC Stand. Life
Indiabulls Hsg
L&T Fin.Holdings
LIC Hsg Fin
M&M Fin.
Muthoot Fin
PNB Housing
1 Day (%)
1.4
-0.7
-1.0
1.6
-0.1
0.1
-0.7
1.1
3.4
0.1
-1.7
0.4
3.6
-0.2
-1.0
-0.8
-1.3
-2.1
0.8
-0.2
0.9
0.5
-1.6
-0.1
1.6
-0.9
-1.5
-1.6
-0.5
-1.9
-0.9
-2.0
-1.4
-1.8
-1.9
-1.6
0.3
-0.7
-0.1
-1.3
-0.2
-1.1
1.1
-0.8
1.1
0.5
-1.6
-1.2
-1.1
-0.1
-1.1
1M (%)
5.7
-3.1
0.3
4.8
5.8
6.1
-1.8
14.0
12.2
5.6
1.1
4.6
1.7
11.6
0.6
2.7
-2.6
1.8
-0.8
-3.5
0.6
0.2
-1.5
-1.8
2.5
-2.3
-2.6
-1.6
-0.5
-5.5
-14.6
-6.2
-5.6
-7.2
-7.3
-11.7
-8.4
-0.7
-0.3
-1.1
0.2
-4.9
-0.6
-1.8
-0.7
0.0
-2.8
-6.0
5.2
4.5
-2.3
12M (%)
-2.8
50.6
25.5
62.5
-0.6
72.4
43.4
140.6
166.2
23.2
23.6
27.9
45.6
84.1
-9.7
116.1
24.6
83.6
2.4
67.2
57.8
37.4
-8.9
52.5
31.9
41.0
54.9
79.5
40.7
8.5
63.2
40.5
78.8
49.9
24.7
17.6
Company
Repco Home
Shriram City Union
Shriram Trans.
Capital Goods
ABB
Bharat Elec.
BHEL
Blue Star
CG Cons. Elec.
CG Power & Inds Sol.
Cummins
GE T&D
Havells
K E C Intl
L&T
Siemens
Solar Ind
Thermax
Va Tech Wab.
Voltas
Cement
Ambuja Cem.
ACC
Birla Corp.
Dalmia Bharat
Grasim Inds.
India Cem
J K Cements
JK Lakshmi Ce
Ramco Cem
Orient Cem
Prism Cem
Sagar Cements
Sanghi Inds.
Shree Cem
Ultratech
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Cons.
GSK Cons.
HUL
ITC
Jyothy Lab
Marico
Nestle
Page Inds
Parag Milk
Pidilite Ind.
P&G Hygiene
Prabhat Dairy
United Brew
1 Day (%)
-0.6
-2.4
0.6
0.1
-1.7
-0.4
1.6
-0.6
2.3
-0.6
2.7
0.0
1.3
-0.4
0.9
0.0
-1.3
0.5
-1.9
0.1
0.8
-0.7
0.7
-1.0
-1.0
0.8
-0.9
0.7
-0.2
-0.6
1.0
2.2
0.3
0.1
-0.3
-1.2
0.4
-1.6
0.4
-0.2
1.8
0.2
-0.4
-1.0
-0.3
-0.3
2.8
-0.9
-1.4
0.2
-3.5
0.7
1M (%)
7.2
0.0
14.2
-1.7
-3.2
-2.1
11.5
5.6
5.1
5.6
-0.7
5.4
13.3
3.4
2.0
0.9
11.8
3.5
2.9
2.9
3.7
3.1
-0.4
-3.8
1.7
11.1
5.6
11.7
2.1
-0.1
2.0
16.9
5.3
0.4
-2.2
-2.5
2.8
0.7
-1.2
0.1
8.1
7.1
1.7
-2.8
2.2
3.0
9.2
22.2
6.3
1.8
35.0
-4.2
12M (%)
28.0
12.8
79.1
34.1
46.6
15.9
81.2
86.1
58.1
12.5
45.0
71.5
170.7
39.2
16.4
79.8
59.1
33.8
106.9
34.6
34.6
83.1
142.9
66.7
61.8
63.7
23.2
51.0
34.4
47.0
36.8
183.6
30.7
35.4
30.6
64.6
21.5
26.6
33.7
33.8
32.1
67.4
11.0
11.5
26.6
31.2
94.6
10.6
53.6
35.8
126.5
40.3
113.9
73.2
29.4
37.1
143.3
58.1
37.0
85.9
107.5
2.7
79.2
73.1
58.8
29 December 2017
22

MOSL Universe stock performance
Company
United Spirits
Healthcare
Alembic Phar
Alkem Lab
Ajanta Pharma
Aurobindo
Biocon
Cadila
Cipla
Divis Lab
Dr Reddy’s
Fortis Health
Glenmark
Granules
GSK Pharma
IPCA Labs
Jubilant Life
Lupin
Sanofi India
Shilpa Medicare
Strides Shasun
Sun Pharma
Torrent Pharma
Infrastructure
Ashoka Buildcon
IRB Infra.Devl.
KNR Construct.
Sadbhav Engg.
Logistics
Allcargo Logistics
Concor
Gateway Distriparks
Media
Dish TV
D B Corp
Den Net.
Ent.Network
Hathway Cab.
Hind. Media
HT Media
Jagran Prak.
Music Broadcast
PVR
Prime Focus
Siti Net.
Sun TV
Zee Ent.
Metals
Hindalco
Hind. Zinc
JSPL
JSW Steel
Nalco
NMDC
Rain Industries
1 Day (%)
1.4
0.3
0.9
-0.4
-0.9
-0.2
-1.3
-1.2
-1.0
1.3
2.5
1.5
-1.3
0.1
-0.3
-2.1
0.7
0.7
0.6
-0.5
-1.7
-0.1
-1.9
-1.4
-0.3
1.1
-0.9
0.9
0.6
1.8
2.5
-1.1
-0.6
-1.7
0.8
0.4
1.2
-0.1
-1.5
5.0
0.2
-0.2
0.1
3.6
2.3
3.9
2.1
6.2
0.8
-0.5
1M (%)
7.6
6.0
11.1
6.5
-3.2
25.0
-3.7
-0.9
7.9
6.3
14.7
3.7
10.2
-1.4
11.8
18.8
5.8
8.1
-7.5
1.3
4.5
8.5
-2.7
-0.6
16.3
11.3
23.5
3.2
-5.2
-2.6
-1.6
11.7
-1.7
3.6
0.6
-2.8
9.0
2.9
7.6
18.9
2.4
12.9
0.3
9.8
2.6
16.7
5.8
5.1
9.2
4.7
12M (%)
94.0
-10.9
35.8
-16.7
5.0
74.7
21.2
7.5
35.2
-20.8
-8.5
-34.0
30.6
-9.8
15.9
25.2
-39.3
12.0
-10.5
-19.7
-8.6
7.6
57.8
23.0
90.0
54.4
20.9
57.8
1.7
-1.7
-0.8
59.1
-6.7
15.5
-3.6
36.4
5.9
27.0
86.9
-31.4
108.9
32.4
79.3
24.5
198.5
71.2
44.8
14.1
589.7
Company
SAIL
Vedanta
Tata Steel
Oil & Gas
BPCL
GAIL
Gujarat Gas
Gujarat St. Pet.
HPCL
IOC
IGL
Mahanagar Gas
MRPL
Oil India
ONGC
PLNG
Reliance Ind.
Retail
Jubilant Food
PC Jeweller
Titan Co.
Technology
Cyient
HCL Tech.
Hexaware
Infosys
KPIT Tech
L&T Infotech
Mindtree
Mphasis
NIIT Tech
Persistent Sys
Tata Elxsi
TCS
Tech Mah
Wipro
Zensar Tech
Telecom
Bharti Airtel
Bharti Infratel
Idea Cellular
Tata Comm
Utiltites
Coal India
CESC
JSW Energy
NHPC Ltd
NTPC
Power Grid
Tata Power
Others
Arvind
Avenue Super.
Bata India
BSE
1 Day (%)
1.8
1.9
1.8
-1.6
0.5
1.2
-0.4
-1.0
-2.3
-0.8
-1.6
0.8
4.0
0.2
0.0
0.2
-0.7
0.7
0.2
2.5
-0.7
0.7
0.0
0.8
1.2
0.4
-0.3
1.4
2.2
-0.9
0.3
-0.9
0.7
-0.6
-0.6
0.3
1.0
-1.6
0.2
-0.7
-0.4
0.6
-1.0
-1.1
0.0
1.1
0.1
-1.0
1.5
1M (%)
14.6
9.7
4.3
3.3
10.5
-2.8
7.8
0.8
0.4
0.6
-2.9
3.0
0.3
6.3
-3.1
-2.0
-4.6
11.3
4.2
3.7
2.2
6.4
5.0
-2.4
9.4
12.5
-1.7
1.5
7.9
-2.3
-2.1
0.1
4.6
-0.1
7.9
-2.6
7.4
-1.4
-4.3
3.0
8.7
14.4
-3.7
-4.4
-3.8
0.7
1.9
0.2
-1.4
12M (%)
92.2
57.0
89.2
28.0
60.6
61.8
65.6
50.6
24.1
85.5
40.7
34.8
14.2
1.7
36.9
75.7
106.3
133.9
171.7
19.4
8.8
67.7
3.5
28.6
61.3
20.2
29.9
53.3
13.7
39.8
13.5
5.2
31.1
-5.4
76.9
8.5
43.2
12.3
-11.0
65.4
51.9
20.9
9.3
10.6
24.8
35.4
70.2
29 December 2017
23

MOSL Universe stock performance
Company
Others
Castrol India
Coromandel Intl
Delta Corp
Eveready Inds.
Interglobe
Indo Count
Info Edge
Kaveri Seed
Manpasand
MCX
Monsanto
Navneet Educat.
Oberoi Realty
PI Inds.
Piramal Enterp.
Quess Corp
SRF
S H Kelkar
Team Lease Serv.
Trident
V-Guard
1 Day (%)
-0.9
1.1
-0.9
1.1
-1.1
4.5
1.1
-1.8
1.1
-0.5
0.0
-1.4
-0.9
-0.8
-0.8
4.6
-0.2
5.5
0.3
0.5
0.2
1M (%)
-3.9
12.4
13.9
1.2
3.7
2.6
4.0
-1.6
10.9
-4.5
-2.5
-5.8
-3.6
1.5
3.0
22.9
3.6
12.9
12.3
-3.9
1.5
12M (%)
3.1
101.2
183.9
119.0
45.5
-20.6
42.0
38.7
69.0
-25.4
9.7
47.7
62.4
18.0
87.1
76.9
29.2
-2.8
181.5
59.3
112.3
29 December 2017
24

NOTES
29 December 2017
25

THEMATIC/STRATEGY RESEARCH GALLERY

REPORT GALLERY
RECENT INITIATING COVERAGE REPORTS
Rs

DIFFERENTIATED PRODUCT GALLERY

Disclosures:
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the Regulations, is engaged in the business of providing Stock
broking services, Investment Advisory Services, Depository participant services & distribution of various financial products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed
public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock
Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Metropolitan Stock Exchange Of India Ltd. (MSE) for its stock broking activities & is Depository participant with Central Depository Services Limited
(CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/Associate%20Details.pdf
Pending Regulatory Enquiries against Motilal Oswal Securities Limited by SEBI:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold
inquiry and adjudge violation of SEBI Regulations; MOSL requested SEBI to provide all documents, records, investigation report relied upon by SEBI which were referred in Show Cause Notice and also sought personal
hearing. The matter is currently pending.
MOSL, it’s associates, Research Analyst or their relative may have any financial interest in the subject company. MOSL and/or its associates and/or Research Analyst may have beneficial ownership of 1% or more securities in
the subject company at the end of the month immediately preceding the date of publication of the Research Report.
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from
time to time, have a long or short position in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn
brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential
conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the
recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research
report.
Research Analyst may have served as director/officer, etc. in the subject company in the last 12 month period. MOSL and/or its associates may have received any compensation from the subject company in the past
12 months.
In the last 12 months period ending on the last day of the month immediately preceding the date of publication of this research report, MOSL or any of its associates may have:
managed or co-managed public offering of securities from subject company of this research report,
received compensation for investment banking or merchant banking or brokerage services from subject company of this research report,
received compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company of this research report.
Subject Company may have been a client of MOSL or its associates during twelve months preceding the date of distribution of the research report.
MOSL and it’s associates have not received any compensation or other benefits from the subject company or third party in connection with the research report. To enhance transparency, MOSL has incorporated a Disclosure
of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report. MOSL and / or its affiliates do and seek to do business including investment banking with
companies covered in its research reports. As a result, the recipients of this report should be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research
Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and may not be altered in any way, transmitted to,
copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of MOSL. The report is based on the facts, figures and information that are considered
true, correct, reliable and accurate. The intent of this report is not recommendatory in nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not
been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice.
The report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments for the clients. Though
disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as customers by virtue of their receiving this report.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Disclosure of Interest Statement
Analyst ownership of the stock
Companies where there is interest
No
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental research and Technical Research. Proprietary
trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOSL research activity and therefore it can have an independent view with regards to
subject company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures Commission (SFC)
pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with
Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any
investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research
Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is
not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S.
persons. This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional
investors"). This document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional
investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and
therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or
appropriate to your specific circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this document should make such investigations
as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the
views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time
without any prior approval. MOSL, its associates, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities
mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities
functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: SEBI Registration: INZ000158836; CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser: INA000007100.
Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal Commodities Broker Pvt. Ltd.
offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products
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